Fashion mogul Lord Alliance of Manchester has warned that retailers who fail to invest in domestic manufacturing are ‘doomed’.

Price rises in China have undermined the advantage of buying from Far Eastern factories and rapidly changing internet-led fashion demands mean retailers need to source clothes from closer to home to keep up with trends, he said.

Alliance’s £752 million internet shopping firm N Brown, whose brands include Simply Be, has re-established its UK manufacturing base over two years to cut supply times and the need for discounts.

‘Businesses need to realise their future depends on serving the customer, and you cannot serve the customer with clothing that is 12 months old,’ he said. ‘If you think you can survive doing that, forget it, you’re doomed.’

It can take six months for clothes to be made and delivered and up to 12 months if the time taken to buy dyes and raw materials is added. Arcadia chief Sir Philip Green, who releases his latest profit figures this week, has increased his use of UK factories in the past year by a fifth to 47.

Asda’s clothing boss Andrew Moore also said the store had increased UK production from one to five factories to respond to the latest trends. That supported a push in lingerie and nightwear over the past year that helped double sales.

UK retailers moved the vast majority of clothing production abroad more than a decade ago to make use of cheap labour. But attempts have been made to revitalise home-grown industry. Manchester City Council has set up a centre for excellence for the textiles industry, led by former Rochdale MP Lorna Fitzsimons.

Marks & Spencer has increased UK production in clothing and home products by 20 per cent to £250 million over five years.